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Gymboree significantly boosts 1Q profit outlook

Gymboree Corp. raised its first-quarter earnings forecast sharply Thursday, sending its stock up more than 23 percent in morning trading.
/ Source: The Associated Press

Gymboree Corp. raised its first-quarter earnings forecast sharply Thursday, sending its stock up more than 23 percent in morning trading.

The retailer now expects profit of 50 cents to 56 cents per share, up from a prior forecast for net income in a range of 18 cents to 25 cents per share.

Analysts polled by Thomson Reuters, whose estimates normally exclude one-time items, predict first-quarter earnings of 23 cents per share.

Gymboree credited its new outlook to improved sales and margin performance as well as its cost control efforts.

The company's stock climbed $5.14, or 23.5 percent, to $26.94 in morning trading.

"Compared to the trends we were seeing in February, we saw a steady and significant increase in sales performance during the month of March," Chairman and Chief Executive Matthew McCauley said in a statement.

The company also adjusted its first-quarter same store sales outlook to a decline in the mid-teens range. It previously forecast a same-store sales decline of 20 percent to 25 percent.

Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

Gymboree runs 897 retail stores.